House prices in the East Midlands heading south

It can be no surprise to see that house prices in the East Midlands have started to head south for the winter. With inflation on the rise matched with the disastrous mini budget the Bank of England sees the only solution to raise interest rates to quell demand. According to Halifax, this was the sharpest fall since February 2021, and took the typical property price to a five-month low of £292,598. Meanwhile, although the pace of annual growth continued to ease in October, average prices remain at near record highs.

Halifax Mortgages director Kim Kinnaird said: “Though the recent period of rapid house price inflation may be at an end, it’s important to keep this in context, with average property prices rising more than £22,000 in the past 12 months and by almost £60,000 (25.7%) over the past three years, which is significant.” While a post-pandemic slowdown was expected, Kinnaird said the housing market received a significant shock as a result of the mini-Budget, which resulted in a sudden acceleration in mortgage rate increases.

Kinnaird said rates were likely to have peaked for now, but recent events had encouraged those with existing mortgages to look at their options, and some would-be homebuyers to pause. The Halifax House Price Index found that property price inflation weakened across all buyer types in October. Meanwhile, there was a notable drop in property prices for first-time buyers, with annual growth falling from 10.1% in September to 7.5% in October. All English regions, with the exception of the North East, experienced weaker annual price inflation in October compared with September. The data identified that the West Midlands now has the joint highest annual growth of any UK region at 11.7% (and an average property price of £254,962), down from 13.2% the previous month.

Kinnaird said: “The rising cost of living coupled with already stretched mortgage affordability is expected to continue to weigh on activity levels. With tax rises and spending cuts expected in the Autumn Statement, economic headwinds point to a much slower period for house prices.”

Raising rates to quell demand is a slight surprise as current inflation seems to be supply driven, higher fuel prices, supply issues internationally causing shortages, rather than demand, but we can only play with the cards we have been dealt and this strategy makes home buying more expensive as well as re-mortgaging. 

I do not anticipate any kind of crash, the money men call it a correction, which is what we will see in the coming months, perhaps a 10% to 15% drop until the economy gets going again.

If you have had a buyer pull out due to the uncertainty why not contact us for a fair price to get you moving again.


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